Causality relationship between energy demand and economic growth in Nigeria
This paper attempts to examine the causal relationship between electricity demand and economic growth in Nigeria using data for 1970 – 2003. The study uses the Johansen cointegration VAR approach. The ADF and Phillips – Perron test statistics were used to test for stationarity of the data. It was found that the data were not stationary at level but only after first differencing i.e. the data were I (1). The Johansen co integration technique reveals that one co integrating relationship exists between real GDP and Electricity demand in Nigeria. The result of the study reveals that there is unidirectional causality between energy consumption and economic growth i.e. energy consumption Granger causes economic growth in Nigeria based on the available data estimated. The result has useful implications on account of energy conservation and energy related pollution in Nigeria.
Global Journal of Social Sciences Vol. 6 (1) 2007: pp. 43-50